HMA woos Munroe team

One way of predicting how Health Management Associates would operate Munroe Regional Medical Center is to look at what HMA has done at other facilities it has bought or leased.

By Fred HiersStaff writer

ROCKLEDGE — One way of predicting how Health Management Associates would operate Munroe Regional Medical Center is to look at what HMA has done at other facilities it has bought or leased.

On Wednesday, nine Munroe trustees and administrators took just such a look. They trekked to Wuesthoff Health System Rockledge, which HMA purchased 2 1/2 years ago along with sister hospital Wuesthoff Health System Melbourne.

There they met with Rockledge staff and HMA leadership for a frank discussion about Munroe's future if it accepts HMA's $200 million lease offer and written pledge to pump another $200 million into facility upgrades and equipment.

HMA is proposing a combined HMA/Shands operation, with HMA overseeing the lease and Shands offering support as a research, academic and specialty care facility.

During a five-hour gathering, Munroe officials met with HMA and Wuesthoff staff, toured the pristine hospital, and discussed HMA intentions for Munroe. If Munroe trustees take the lease money, they would invest it in Marion County health-related services.

Nothing was off limits as Munroe, HMA and Wuesthoff administrators discussed:

• A recent "60 Minutes" segment during which former HMA staffers accused the health care company of pressuring them to admit ER patients to make more money.

• Complaints from some Munroe-affiliated doctors that Shands at the University of Florida is more competitor than potential partner.

• Fears that Munroe would be a patient clearing house, sending patients to Shands.

• Concerns that HMA would eliminate unprofitable services and not invest enough in Munroe.

• Concerns that Ocala, as a relatively small community, would get lost in HMA's large network, and that its needs would often lose out against the goals of the larger corporate group.

Also during the gathering, small groups broke off for more discussions: administrators with administrators, doctors with doctors, Munroe trustees and board members with HMA and hospital advisory board members.

Afterward, some Munroe leadership said the face-to-face gathering helped clear the air about how some HMA hospitals are run, how doctors and patients are treated, and how a potential Munroe/HMA/Shands partnership could shake out.

"To my satisfaction, these are people who will complement the hospital (Munroe)," said Dr. Ravi Chandra, a vascular surgeon and vice chairman of the Marion County Hospital District board of trustees.

The 421-bed Munroe still provides excellent medical service and isn't financially drowning — yet. It does rely on investment income and annually dips into savings to help make ends meet.

Munroe is owned by the state-sanctioned Marion County Hospital District and is overseen by seven trustees who are appointed by the County Commission.

The trustees lease the hospital to Munroe Regional Health System Inc., which is overseen by a 13-member board, some of whose members also are district trustees.

Without property tax support — a ballot measure failed in November — Munroe leadership says it needs an outside leasee to invest and keep the hospital competitive.

HMA/Shands and Duke/LifePoint are the final two suitors. Next week, Munroe leadership will visit a LifePoint hospital in Danville, Va.

•••

HMA bought the Rockledge and Melbourne hospitals for $145 million in 2010. At the time, they were struggling; today, HMA's turnaround efforts have met with good reviews from the community on Florida's East Coast.

Chandra said if HMA is allowed to lease Munroe for the next 40 years, he believes the company would work to "grow the facility to … the betterment of the community."

Chandra said his concern was whether HMA's acquisition had helped Wuesthoff become a better hospital.

The message he got from other doctors led him to conclude: "Yes, (the purchase) has helped us."

"I feel pretty good about it (the HMA meeting)," Chandra said.

The "60 Minutes" piece alleged HMA pressures doctors to admit patients to make more money. HMA Senior Vice President Alan Levine said the charges, which also have been levelled by former employees, aren't true.

He painted the accusers as disgruntled, fired employees bent on discrediting HMA for money.

He pointed out that while a handful of former employees made the accusations, patient data for HMA hospitals doesn't bear them out.

Citing several health care analysts who conclude HMA admittance rates are typical for the industry, Levine predicted the accusations will be proven false.

Sheryl Skolnick, a health care analyst with CRT Capital Group LLC in New York City, conducted a lengthy study of HMA hospitals and compared its admittance rates to that of area, competing hospitals. She concluded 64 percent of HMA hospital markets had lower patient observation rates than competitors.

Keeping patients at "observation" status costs hospitals because they can't charge insurance carriers and the patients themselves nearly as much as they could if the patients were admitted.

During a telephone interview, Skolnick said Munroe's choice — HMA/Shands or Duke/LifePoint — comes down to which corporate culture fits best.

"The folks at LifePoint are really lovely people, but they're a little sharper and edgier at HMA," she said.

That edgier approach can be seen in aspects like bill collections, Skolnick said.

"HMA doesn't mess around. Two weeks (late in paying your bill) and it's off to collections," she said.

"They don't run them (the hospitals they buy) into the ground," she said. "Quite the opposite."

Every hospital lease or purchase is different, but typically during an HMA operation, the health care company targets struggling, non-urban hospitals that it thinks can be turned around with cash infusions and can benefit from the help of a large, health care group.

It's a strategy that HMA has invoked many times. It has grown to 70 hospitals in 15 states and become one of the country's most profitable health care conglomerates.

"They buy (the hospital), they fix it, grow it and do it again (with the next hospital HMA buys)," Skolnick said during the interview. "It's a very simple strategy."

Skolnick, who has a Ph.D in economics from Washington University, said "fixing" means aligning the hospital's services to the community's needs and "fiercely protecting" that market share.

Levine said Skolnick's conclusions about HMA admittance is wrong, and said Skolnick used tainted data that didn't accurately reflect competing hospitals or the issues that led to the patients' admittance.

"You can't pressure a doctor to admit. That's ridiculous," he said.

He also supplied a copy of a letter from Dr. James D. Ford, medical director the medical Center of Southeastern Oklahoma Durant, which was mentioned in the "60 Minutes" piece.

"As an emergency room medical director who has worked at the same HMA hospital for 25 years I can say, unequivocally, that I have never been asked to admit any patient to my hospital in order to meet any established goals or quotas," Ford wrote.

•••

As for Shands: Levine said the plan isn't to send Munroe patients to Gainesville. Rather, HMA would establish comprehensive criteria to allow local doctors to send patients to Shands if those patients need advanced, specialized care.

"We're not going to invest this kind of money (in Munroe) to send patients to Gainesville," he said.

As for concerns about HMA taking over Munroe and firing staff, Levine said "the ultimate goal is to grow the hospital" and that's not possible with too many changes at once.

At Wuesthoff, some IT people were no longer needed after HMA's purchase. But they found jobs at other HMA hospitals, according to HMA Vice President Pete Lawson.

As for concerns that Ocala would be lost amid the other HMA hospitals, Levine said, "Munroe would instantly be one of our larger hospitals … and we would make a capital commitment."

"We're a very capital focused (group). That's why we've been successful," he said.

HMA spent $27 million for improvements to the Wuesthoff Rockledge facility since buying it in 2010.

Dr. Ricardo Henriques, a Rockledge internal medicine physician, told Munroe officials the HMA buyout has helped him help patients, and HMA's financial infusion is apparent. He has a private practice and is not employed by HMA.

"These guys have been extremely attentive … It's been a serious pleasure to work with these guys," he said.

•••

Melvin Mills is now a member of the Rockledge advisory board. The board only makes suggestions to HMA about the hospital's needs; it has no final say. Mills also sat on the previous Rockledge board and pushed for the HMA sale.

"They always ask for our input," he said of HMA. "They want to be the best hospital they can in the community."

"And any suggestions we've made (for the hospital), they've never said no," he said.

Rockledge City Manager Jim McKnight did not attend Wednesday's gathering. But during a telephone interview he said his family has ties to the original Wuesthoff founders, who established the hospital more than 60 years ago. McKnight's wife works at a competing hospital.

No hospital services were cut after the takeover, he said, and he has not heard community complaints about HMA's oversight.

When McKnight's mother was critically ill and a patient at the HMA hospital, she received "impeccable" care.

•••

Toward the end of the gathering, Lawson asked his Munroe visitors to carefully consider the HMA/Shands and Duke/LifePoint proposals.

But remember, he said: The longer you wait, the more competing hospitals will eat into Munroe market share.

"It does come down to pulling that trigger if you're going to move forward," he said.

Dr. Ken Marino, a Marion County Hospital trustee, said at least one thing is certain.

"I don't see the days of independent hospitals standing alone ever again," he said, citing the financial difficulties hospitals such as Munroe were facing.